Tourism in perspective July 2017 NBTC Holland Marketing Research Department
Table of contents Introduction 1. Developments international tourism 2. Developments inbound tourism the Netherlands 3. Analysis benchmark North West Europe 4. Important developments 2017 5. Forecast inbound tourism the Netherlands 2
Introduction This report describes the outline of the trends and developments of national and international tourism and the factors that influence it. Firstly brief details are given of the international developments, followed by an assessment of the position of the Netherlands. A benchmark analysis provides insight into development of inbound tourism in the Netherlands compared with surrounding countries: Belgium, Germany, the United Kingdom and Denmark. Besides looking back, a growth expectation is given for the current year (2017) and for 2020. The next update of this report will be published in January 2018 on www.nbtc.nl/en > Research and statistics NBTC Holland Marketing Research Department July 2017 All of the data within this report are property of NBTC. Publication and inspection by third parties, both fully and partial, is not permitted without the consent of NBTC. Nothing from this publication may be duplicated and/or published by means of print, photocopy, microfilm, digital technology, internet, CD-ROM or in any other way, without prior permission from NBTC Holland Marketing. All data provided as known by NBTC at the time of publishing this report. Even though the utmost care was taken in putting together this report, it is possible that certain information is incomplete or incorrect. NBTC does not accept any liability for the contents. No rights may be derived from the contents. Subject to changes. 3
1. Developments international tourism 4
Developments international tourism Worldwide tourism grew 3.9% in 2016, which resulted in over 1.2 billion international arrivals. In Europe, the number of international arrivals grew 2,1% in 2016 compared to 2015. Especially Middle/East Europe (+4.3%) and Northern Europe (+5.7%) benefited. According to UNWTO, international tourism in Western Europe, including the Netherlands, declined with 0.4%. Partly due to the terrorist threat/ attacks in Paris and Brussels and uncertainties regarding Brexit. UNWTO predicts a growth of 3%-4% in international tourism in the current year (2017). For Europe a growth of 2% to 3% is predicted. 1400 1200 1000 800 600 400 200 855 Number of international arrivals worldwide (x million) 911 928 892 951 995 1.042 1.090 1.137 1.189 1.235 Arrivals (x million) 2014 2015 +/- 2016 2016/2015 Europe 576 603 615 2.1% Asia, Pacific 270 284 309 8.6% America 182 193 200 3.9% Africa 55 54 58 8.2% Middle East 55 56 54-4.0% total 1,137 1,189 1,235 3.9% 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: UNWTO 5
2. Developments inbound tourism the Netherlands 6
Development inbound tourism Netherlands Inbound tourism in the Netherlands has undergone significant growth in the past decades, except for the crisis years 2008 and 2009. Compared to the previous year, the number of international guests that visited the Netherlands for leisure or business purposes grew 5%. This resulted in a rise in the number of guests to 15.8 million. Also in the first 4 months of 2017 the Netherlands welcomed many more guests than a year earlier (+13%!). In chapter 5 we will focus on these figures and our forecast for the whole of 2017. 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Number of guests in the Netherlands (x 1,000) 10.739 11.008 10.104 9.921 15.007 15.829 13.925 12.783 12.205 10.883 11.299 2006 2007 2008 2009 2010 2011 2012* 2013 2014 2015 2016 Important explanations for the growth in 2016: recovering economies in Europe and the US weaker euro, which made it cheaper for citizens of non-euro countries to spend their holiday in the Netherlands terror threat in Paris and Brussels has led to adapted travel behaviour and trips (to some extend in the advantage of The Netherlands) marketing and promotion efforts, such as the theme year Jeroen Bosch 500, have had a positive influence on the growth of tourism to the Netherlands Source: Statistics Netherlands (CBS) * Trend reversal, due to improved registration 7
Inbound tourism by country of origin (1) In 2016, the Netherlands attracted 6% more visitors from other European countries than the year before. Especially important countries of origin, such as Germany and Belgium, showed a relatively high growth number (+8%). An important explanation for this growth is the growth in their short break market which can be attributed partly to positive economic developments of these countries. The Netherlands, as a neighbouring country, benefits from this development. The number of visitors from Russia decreased by 15%. This can be explained by Russian sanctions towards the EU (i.e. travel restrictions for some professions), the strong depreciation of the Russian currency and decreasing income levels for many Russians. Due to these factors many Russians did not travel abroad. All accommodation guests (x 1,000) 2013 2014 2015 2016 +/- 16/ 15 Europe 10,286 11,195 12,050 12,743 6% - Germany 3,495 3,894 4,283 4,615 8% - Belgium 1,673 1,828 1,965 2,132 8% - UK 1,680 1,857 1,967 2,045 4% - France 680 725 750 788 5% - Italy 461 503 543 528-3% - Spain 395 396 432 444 3% - Switzerland 231 256 271 264-3% - Sweden 142 142 154 156 1% - Denmark 144 141 155 144-7% - Russia 203 196 152 130-15% - Norway 127 125 132 115-13% - Rest of Europe 1,055 1,132 1,246 1,382 11% Intercontinental 2,498 2,730 2,957 3,086 4% Delimitation inbound tourism Statistics Netherlands records through Statistics of overnight accommodations establishments (SLA) how many foreign guests have visited the Netherlands. The basis for these statistics are foreign visitors who spend at least one night in a hotel, bungalow park, on a campsite, or in a group accommodation. Holidays: not included in the statistics are holidays on own or third-party boats, stays in second homes, cruises, and overnight stays in new emerging forms (like social travelling). Furthermore, day visits and visits to family and friends are not included. More than a million guests in Airbnb accommodations in 2016 According to Airbnb, their accommodations in Holland received a total of 1.4 million guests in 2016 of which 83% were foreign. This results in approximately 1.16 million international guests in Airbnb locations last year. Total 12,783 13,925 15,007 15,829 5% Source: Statistics of overnight accommodations establishments (SLA), statistics Netherlands, edited by NBTC * Preliminary CBS figures 8
Inbound tourism by country of origin(2) In 2016, the number of American visitors went up 14% resulting in almost 1.2 million guests. This positive change occurred partly due to positive economic developments in the USA in combination with a cheaper Euro, which makes it cheaper to spend the holiday in Eurozone countries. On the other hand, after years of relatively strong growth we experienced a decrease in guests from Brazil (due to the bad economical situation) as well as Asia (in part explained by increased terror threats in Western Europe (see explanation below)). In addition, India introduced some new direct flights to Amsterdam in 2016 which explains a positive effect on guests from this market. All accommodation guests (x 1,000) 2013 2014 2015 2016 +/- 16/ 15 Europe 10,286 11,195 12,050 12,743 6% America 1,337 1,431 1,508 1,646 9% - USA 926 991 1,035 1,182 14% - Canada 140 143 155 155 0% - Brazil 119 139 150 115-23% Asia 875 976 1,130 1,103-2% - China (incl. Hong Kong) 217 249 330 297-10% - India 80 87 101 127 25% - Japan 152 147 138 109-21% - Indonesia 38 42 47 56 18% Terror threat & effect on inbound tourism Up to 2016 we have experienced most growth from the Asian markets. However, during the year 2016 for the first time a decrease in Asian guests was seen (-2%). This is considered a direct consequence of the recent terrorist attacks and increased terror threat in a number of Western European countries. Guests from China and Japan like to avoid risk which led to adaptations in their travel plans. For example, some Chinese and Japanese visitors decided to travel to the USA instead. Australia and Oceania 165 188 189 200 6% Africa 121 135 130 137 5% Total 12,783 13,925 15,007 15,829 5% Source: Statistics Netherlands, edited by NBTC 9
Economic values inbound tourism the Netherlands 2016 The average business traveller spends 1,035 per stay The average holidaymaker spends 599 per stay 120,000 of spending results in one job in inbound tourism Total economic value 2016 The 15.8 million international visitors in 2016 accounted for an economic value of about 11.4 billion, of which approximately 10.5 billion benefited the Dutch economy. Total tourism jobs 2016 The economic value of 10.5 billion leads to a direct employment of 86,000 people. Source: Research Inbound Tourism NBTC (2014) Adaptation NBTC (2016) Source: Tourism Satellite Account CBS 10
11 3. Analysis benchmark North West Europe
Inbound tourism benchmark countries Development incoming tourism 2015-2016 Market share within North West Europe 2016 Percentage of growth incoming tourism 2017 (most recently available, guests or nights) Belgium -10% 6.9% +5% (guests, Jan - Mar 2017) Denmark +6% 10.4% +8% (nights, Jan - Apr 2017) The benchmark countries in North West Europe: Denmark Germany Belgium Netherlands United Kingdom Germany +2% 33.0% +5% (guests, Jan - Apr 2017) UK +4% 34.9% +11% (guests, Jan - Apr 2017) Netherlands +5% 14.7% +13% (guests, Jan - Apr 2017) Source: Tourmis (based on statistical institutes benchmark countries) Within North West Europe, Germany and the United Kingdom jointly account for more than two third of the inbound tourism. The Dutch market share was in 2016 with 14.7% slightly higher than in 2015 (14.3%). The market share of the Netherlands is higher than the market share of Denmark (10.4%) and Belgium (6.9%). The first available figures for 2017 shows that again the Dutch market is expected to gain extra market share: the Netherlands has achieved the highest growth rate by 13% in 2017. The graph alongside shows the indexed developments of the number of guests over the years 2011-2016 (2011 =100). This means that all the points on the line are compared with 2011. In comparison with 2011, inbound tourism of the Netherlands grew 40% in 2016, the biggest growth of all countries. Especially the high growth percentage of the Netherlands in the last three years, was an important explanation for this. Visits to Belgium have declined sharply in 2016 due to the terror attacks in Brussel. 145 135 125 115 105 95 Developing inbound tourism per destination (based on indices, 2011=100) 2011 2012 2013 2014 2015 2016 Belgium Denmark Germany the Netherlands UK 12
Qualitative interpretation by country The Netherlands benefits more than average of growth from the other benchmark countries Germany, Belgium and the United Kingdom. These countries have a significant share within our inbound tourism. In addition, we have seen a significant increase in visitors from America which is an important source market. Within other countries the number of American visitors stabilized or showed a big decrease (Belgium). The incoming tourism to the UK did not grow as strongly in the second and third quarters of 2016 as in the other quarters. This may be related to the terror attacks in March and June of that year in London. However, it is also clear that tourism recovers relatively quickly, looking at the overall growth of + 9% in the last quarter. Remarkable is the growth of the number of guests from Japan (+ 27%). Although Germany achieves an overall growth of + 3% in the first half of 2016, growth in the second half year is down (+ 1%). During the year, Germany has faced a series of terror attacks, including three in July and 1 in December. This has an effect on the visit to the country, as we see in the decline in August of -3%. Not so much visitors from the neighbouring countries but especially guests from countries further away are more sensitive to the aspect of insecurity. In 2016, Denmark experienced strong growth in the total number of nights from Belgium (+24%) and South Europe. Denmark has benefited especially from its image of being a safe destination in times of increased terror threats in its neighboring countries. On the other hand, Germany, the main country of origin for Denmark, showed "only" 7% growth. Also there were fewer guests from other Scandinavian countries than one year before. In 2016, Belgium has suffered from terrorist attacks and terror threat in many different ways. This clearly resulted in strong decline of inbound tourism figures. All source markets showed a decline; especially those that are further away. Inbound tourism from Japan decreased with 48% in the first eight months of 2016. Subsequently visitors from China (- 29%) and India (-31%) showed a significant decrease as well as Italy (-24%) and the USA (-23%). 13
14 4. Important developments 2017
Terror threat remains In recent times, Europe has regularly been the target of terrorist attacks, unfortunately, with many fatal victims. There is a continuous threat, which also affects international tourism. The statistics of the number of international guests in the countries where attacks have been, clearly show that the attacks have a frightening effect on the short-term. For example, in the months following the attack in Brussel in 2016, Belgium received much fewer guests than one year earlier. The result: a drop of no less than 10% for the whole year. A big blow for tourism in Brussels and all the suppliers around it. Holidaymakers prefer countries and cities that are experienced as safe. For example, there is currently a shift from the east to the western Mediterranean, which is particularly beneficial to Spain and Portugal. Nevertheless, we see that there is also a form of habituation. When rest is restored, the destination is visited again. And this process of habitation also seems to be getting shorter. Bron: www.breithart.com 15
Brexit causes a (temporary) dip At the end of June last year, a majority of the British people voted in favor of a UK retrieve from the European Union, called the Brexit, in an advisory referendum. Shortly after, Theresa May was appointed as prime minister and at the end of the year, concrete plans were made to make the Brexit formal recognizable to the European Union at the end of March 2017. As it is unclear what the exact consequences are of a Brexit, there is unrest among the British population in the second half of 2016, and the media is highly speculating about potential negative or positive effects. It is clear that the Brexit had an effect on the exchange rate of the British Pound. After the referendum, the value of the Pound has dropped, so the price for a Euro has risen in the United Kingdom. Traveling to Euro countries has become more expensive. 250 200 150 100 50 0 Development guests from the UK (x 1,000) to the Netherlands Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 2015 2016 2017 Development exchange rate Euro/GBP in the last three years In the visit to the Netherlands we see this unrest. From July to November, the growth of the number of British guests to the Netherlands stopped. However, in December there were again more British guests than the year before and this development we also see in the first months of 2017. Although it is still unclear what the exact consequences of the Brexit will be, the impact on visiting our country seems to be limited. Bron: www.wisselkoers.nl, d.d. 26-07-207 16
17 5. Forecast inbound tourism the Netherlands
Inbound tourism the Netherlands Jan- Apr 2017 Incoming tourism grows unabated The preliminary CBS figures for the first four months of 2017 show a continued growth of inbound tourism in the Netherlands. In the period of January April 2017 the Netherlands received more than 5 million international guests. A growth of 13% in comparison to the same period in 2016. From Europe Germany remains a strong growth market; in the first four months we see an 20% increase of guests from Germany. But also notable is the growth in the number of guests from Italy. After the decline in 2016 the inbound tourism from Russia and Denmark seems to recover this year. From intercontinental markets Both the American continents and Asia show strong growth in the first four months of this year. And also Brazil seems to have found the way up. China also shows the familiar big growth. The number of international arrivals from Japan has declined in recent years, but 2017 shows a light recovery. Some explanations for the growth incoming tourism Q1 Beautiful spring weather in the second half of March which has had a positive effect on visits during the spring holidays in April Improving economies and growing consumer confidence in many EU countries and America, the Netherlands is seen as a safe destination in Europe The Euro is still relatively cheap Increasing business travels in combination with more flight connections (for example from Italy to the Netherlands but also from intercontinental countries) Activities connected to the theme year Mondriaan to Dutch design attracts additional visits to the Netherlands Source: CBS, processed by NBTC * Preliminary CBS figures 18
Factors influencing inbound tourism the Netherlands 2017 Factors with a positive/stimulating effect on inbound tourism Factors with a negative/decreasing effect on inbound tourism recovery of European and American economies, the Russians and Brazilians travel again the weaker euro makes it cheaper for citizens of non-euro-zone countries to spend the holiday in euro-zone countries More flights from different countries to the Netherlands international instability (geopolitical tension, terrorist attacks/threat) coming more closer (attacks in Paris, Brussel and Berlin) occupancy rate hotels in Amsterdam grows further (limited space to grow, increasing room prices), (experienced) crowding in the tourist hotspots Themed year Mondriaan to Dutch Design 2017 19
Forecast inbound tourism the Netherlands in 2017 and 2020 All accommodation Guests Guests (x 1,000) (x 1,000) 2016 Prognosis 2017* +/- 17/ 16 Prognosis 2020* Europe 12,743 13,460 6% 13,895 - Germany 4,615 4,980 8% 5,080 - Belgium 2,132 2,245 5% 2,430 - Great Britain 2,045 2,120 4% 2,205 - France 788 815 3% 835 - Italy 528 550 4% 565 - Spain 444 445 0% 455 - Switzerland 264 270 3% 275 - Sweden 156 160 1% 165 - Denmark 144 150 4% 1 155 - Russia 130 145 12% 170 - Norway 115 11 2% 125 - Rest of Europe 1,382 1,470 6% 1,370 America 1,646 1,765 7% 1,885 - USA 1,182 1,290 9% 1,380 - Canada 155 165 5% 175 - Brazil 115 120 4% 130 Asia 1,103 1,235 12% 1,480 - China (incl. Hong Kong) 297 335 13% 460 - Japan 127 145 16% 180 - India 109 110 1% 110 Australia and Oceania 200 200 0% 210 Africa 137 143 4% 150 Total 15,829 16,805 6% 17,615 Source: CBS, processing NBTC, Forecast 2020 based on forcast 2017 * Completed in 5.000 dozens) 1 Expectations 2017 NBTC expects a 6% growth of inbound tourism in the Netherlands in 2017 (= 1 million tourists). The number of foreign tourists will thus amount to about 16.8 million, another record year. The neighbouring countries are, in absolute numbers, responsible for the biggest growth. Almost half of the expected growth comes from Germany and Belgium. Furthermore, the number of tourist from the rest of the European continent (with the exception of Spain) will increase. This also applies for North America as we foresee an 9% increase of tourist from the USA. After a year of decline, NBTC expects visits from the Asian continent will rise sharply in 2017. Visits from Japan are expected to stabilize. Expectations 2020 Based on the expected growth, coming from our future perspective, on the left we give a forecast for 2020. (Note that this differs in number from what was included in our future perspective report, but it is based on the same growth rates). In 2020 NBTC expects to receive 17,6 million international guests, an average yearly growth of 1,6% until 2020. An update of these expectations will be published in January 2018. The 2020 forecast is updated twice a year: in January with the prognosis of the previous year as a starting point, and in July with the prognosis for the current year as a starting point. For more information see our future perspective Destination Holland 2025 through www.nbtc.nl/2025 20